Some of my thoughts + Trading System

GBP/USD Trade #1

CHART 6

Active Wave 6

We determine that a new wave is active by noticing a correction of a valid W40.
(At Least 40 Pips prior to the correction)

  • We redraw our fibonnaccis levels*
  • We disregard the previous W40.5 fibonacci levels*

NEW W40 LOW: 9672
NEW W40 HIGH: 9716

OUR BIAS: No one “whole” candle has closed under 75.0% Fibonnacci Level of the newly drawn W40.6 (40 Pip Wave) so we hold Long, until a whole candle closes below.

I’ve taken the liberty of moving my STOP LOSS to Break Even at 9639 entered off a “whole” candle close above 25% of AW 1 or W 40.1

Regards,
E. Lang


GBP/USD Trade #1

CHART 7

Active Wave 7

We determine that a new wave is active by noticing a correction of a valid W40.
(At Least 40 Pips prior to the correction)

  • We redraw our fibonnaccis levels*
  • We disregard the previous W40.6 fibonacci levels*

NEW W40 LOW: 9691
NEW W40 HIGH: 9741

OUR BIAS: No one “whole” candle has closed under 75.0% Fibonnacci Level of the newly drawn W40.7 (40 Pip Wave) so we hold Long, until a whole candle closes below.

I’ve taken the liberty of moving my STOP LOSS to Break Even at 9639 entered off a “whole” candle close above 25% of AW 1 or W 40.1

Regards,
E. Lang


[B]GBP/USD DAILY REPORT[/B]

[B][B]Daily Pivots: (S1) 1.9625; § 1.9673; (R1) 1.9744; [/B][/B]

Cable’s rise from 1.9261 resumes and strengthens to as high as 1.9742 so far. At this point, further rally is expected to follow towards 1.9750 resistance. As discussed before, break of 1.9750 will encourage further rise towards 1.9846 high.

On the downside, below 1.9675 will argue that a short term top is formed, probably with bearish divergence condition in 4 hours MACD too. Focus will then shift to 1.9587 support. Touching of 1.9587 will confirm that a short term top is formed and should bring lengthier consolidation. But even in such case, downside is expected to be above 1.9452 resistance turned support and bring rally resumption.

In the bigger picture, correction from 1.9846 has completed after three waves down to 1.9261. Break of 1.9846 high will confirm that rally from 1.8517 has resumed for next upside target of 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9917. However, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches key cluster resistance of 2.0106 (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067).

On the downside, it will take a break below 1.9452 support will argue that the whole rise from 1.9261 has completed and shift short term focus back to the downside.

GBP/USD Trade #1

CHART 8

Active Wave 8:
L: 9691 H: 9777

ENTRY: 1.9639
SL: 1.9639
CURRENT PROFIT: +130

We determine that a new wave is active by noticing a correction of a valid W40.
(At Least 40 Pips prior to the correction)

  • We redraw our fibonnaccis levels*
  • We disregard the previous W40.7 fibonacci levels*

NEW W40 LOW: 9691
NEW W40 HIGH: 9777

OUR BIAS: No one “whole” candle has closed under 75.0% Fibonnacci Level of the newly drawn W40.8 (40 Pip Wave) so we hold Long, until a whole candle closes below.

Regards,
E. Lang


[B][U]GBP/USD Trade #1[/U][/B]

[B]CHART 8[/B]

[U][B]A[/B]ctive [B]W[/B]ave 8:[/U]
[B]L: [/B]9691 [B]H: [/B]9777

[B]ENTRY: 1.9639 [/B]
[B]SL: 1.9639[/B]

[B]EXIT: 1.9719 / [/B][B]CLOSING PROFIT: +175 [/B]

[B]We determine that: [/B]One “whole” candle has closed under 75.0% Fibonnacci Level of the newly drawn [B]W40.8[/B] (40 Pip Wave) so we terminate our Long.

Closing Profit +175 pips

Regards,
E. Lang

[B][U]GBP/USD Trade #2[/U][/B]

[B]CHART 1[/B]

[B]ENTRY: 1.9714 [/B]
[B]SL: Floating[/B]

Having exited our long position we are automatically given signals for a short entry since there is a whole candle close below 75%.

We Short and wait for a correction in order to draw our new active W40 wave.

A new wave is determined and active by noticing a correction of a valid W40.
(At Least 40 Pips prior to the correction)

Regards,
E. Lang

GBP/USD Trade #2

CHART 1

Active Wave 1:
L: 9703 H: 9777

ENTRY: 1.9714
SL: Currently Floating
CURRENT PROFIT: 0

We determine that a new wave is active by noticing a correction of a valid W40.
(At Least 40 Pips prior to the correction)

  • We redraw our fibonnaccis levels*
  • We disregard the previous W40.8 fibonacci levels*

OUR BIAS: No one “whole” candle has closed over 75.0% Fibonnacci Level of the newly drawn W40.1 (40 Pip Wave) so we hold Short, until a whole candle closes over.

Please look at the acompanying Head and Shoulder chart as well.

This is a very valid possibility considering that we got rejected by 9750.
We may well have a top here.

Regards,
E. Lang




Hey Guys and Girls

Don’t forget that if you like what you see in my posts and you want to see more :wink: … you can help me get pumped and enthused for the next post by kindly rewarding my modest donations with the thanks they deserve by giving me a few Reputation Points!

Gotta move up you know :cool:

Much Appreciated.

Regards,
E. Lang

PS: Today we’ve made 175 Pips (Closed Trade) and Currently Floating with a short at 25+

You are doing a great job Elang and I am learning a lot from you. Thanks so much for sharing your time and insights.

Ya man - would gladly vote for you.

Question:
Is the magic number 75% coming from both direction (long or short)? I thought it was 25% from a long retrace and 75% on a short retrace.

Hello Ram,

Hope all is well.

It is rather relative, depending on your current bias, what position you have floating.

It is generally 75 to terminate the position and 25 to enter.

EG: If you draw a bullish wave and you don’t have a floating position, you could short when a whole candle closed below 75.

So as you can see in this case you would use 75 for a short entry.

Vice Versa for Bearish W40 waves.

Dear [B]Pwegner[/B]:

Thank you very much for your kind words! I hope you learn things here that help out with your trading!
And when you get good share everything you know, because there is enough bread for everyone.

We tend to sometimes underestimate that even the simplest of words we say in a place like BabyPips can be the key to unlocking someones padlock of Trading Faults and Dilemmas.

So, share, teach and give thanks :smiley:

Regards,
E. Lang

GBP/USD Trade #2

CHART 2

Active Wave 2:
H: 9728 L: 9635

ENTRY: 1.9714
SL: Currently Floating
CURRENT PROFIT: +79

We determine that a new wave is active by noticing a correction of a valid W40.
(At Least 40 Pips prior to the correction)

  • We redraw our fibonnacci levels*
  • We disregard the previous W40.1 fibonacci levels*

OUR BIAS: No one “whole” candle has closed over 75.0% Fibonnacci Level of the newly drawn W40.2 (40 Pip Wave) so we hold Short, until a whole candle closes over.

Regards,
E. Lang


Hi guys just a quick heads up,

It is possible that we only have 1 Active Wave with H: 9777 and L: 9635 and not two ( W 40.1 and W 40.2 )

This would give us a 75 Short termination level of 9741.

Nobody draws perfect waves :rolleyes: … don’t hate me :smiley:

Either way we will see what happens.

Regards,
E. Lang

We had a whole candle close above 75% of W 40.2, but the reason why that happened is:

[B]“Rumors in the market of a U.S. Naval vessel struck by an Iranian missle”[/B]

*The dollar just sold off on vague rumors of US action in Iran. The rumors are variously that there has been some kind of contact between US and Iranian naval vessels in the Persian Gulf or that the US is going to take some action in the near future. Looks like the story has run it course and the dollar-selling/Treasury buying has run its course.

*US officials denying Iranian conflict rumors

*US officials saying Iran story not true

*The rumor was that Iran had launched a missile strike against a US nay ship, now being denied by Pentagon official via Reuters

My bias is still short and i consider this termination signal negative as it was largely emotion and news influenced a spike of fear and confusion.

Some people who were short, got scared by the news, thats all.

Regards,
E. Lang

GBP/USD Trade #2

CHART 3

Active Wave 3:
H: 9738 L: 9635

ENTRY: 1.9714
SL: Currently Floating
CURRENT PROFIT: +25

We determine that a new wave is active by noticing a correction of a valid W40.
(At Least 40 Pips prior to the correction)

  • We redraw our fibonnacci levels*
  • We disregard the previous W40.2 fibonacci levels*

OUR BIAS: No one “whole” candle has closed over 25.0% Fibonnacci Level of the newly drawn W40.3 (40 Pip Wave) so we hold Short, until a whole candle closes over.

Regards,
E. Lang


The attached chart is also a possibility for W 40.1

GBP/USD

Daily Pivots: (S1) 1.9625; § 1.9673; (R1) 1.9744; More
Despite rising further to 1.9777, cable failed to stay firmly above 1.9750 resistance. Subsequent retreat has pushed cable to below 1.9675 minor support with mild bearish divergence condition in 4 hours MACD and RSI. A short term top should be formed at 1.9777 and further consolidation is in favor to follow with risk of pulling back towards 1.9587 cluster resistance (38.2% retracement of 1.9261 to 1.9777 at 1.9580. However, we’d expect downside to be contained above 1.9452 cluster support (61.8% retracement of 1.9261 to 1.9777 at 1.9458) and bring rally resumption.

On the upside, above 1.9777 again will indicate rally from 1.9261 has already resumed for next upside target of 1.9846 high and then 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9917.
In the bigger picture, correction from 1.9846 has completed after three waves down to 1.9261. Break of 1.9846 high will confirm that rally from 1.8517 has resumed. However, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches key cluster resistance of 2.0106 (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067).

On the downside, it will take a break below 1.9452 support to indicate argue that the whole rise from 1.9261 has completed and shift short term focus back to the downside.

Regards,
E. Lang


Elang,

Are there any rules to determine if it’s one continuous wave or two separate waves?

Thanks (dropped a vote in the box)

Dear Mirzyk,

It is very difficult to say.

It is just one of those things that you have to sense with an experienced eye.

I personally know a pro trader wo trades Elliot Waves and gets his waves wrong all the time, but that doesn’t mean his system doesn’t work or that he is a bad trader.

In cases like these we just need to realize our mistakes and take the best action to correct it and minimize our losses so we can safely get back on track.

Trade 2 (Short on GBP/USD) has been terminated as my stop was hit.

The wave which i should have drawn was longer as i said yesterday and quote:

"It is possible that we only have 1 Active Wave with H: 9777 and L: 9635 and not two ( W 40.1 and W 40.2 )

This would give us a 75 Short termination level of 9741."

Which means that the short position we took would have terminated about 4 hours ago approximately, with the current time being: 07:55 GMT

Please see the attached chart to understand what i mean.

Regards,
E. Lang


For today using the retracement system,

I’ve noticed 2 active waves.

I don’t have any positions open yet, i am just speculating as the price is at a very vulnurable level at the moment, totally overbought, yet with somewhat strange signs of a continuing rally.

I will wait for better entry signals.

Regards,
E. Lang

PS: Don’t forget to establish an awareness of the news for today:
Easy-Forex: The Financial Calendar



[U][B]We have 2 types of waves:[/B] Impulsive and Corrective[/U]

I am using a standard Elliot Wave cycle to try and more clearly define the difference.

The impulsive wave in red, is individual, it is independent - it is the RALLY or the DECLINE in a price.

Once an impulse ends it is followed by a correction and then another impulse and then another correction of that impulse and then another correction etc.

When the above is happening and we have impulses followed by corrections, we consider the current move to be healthy, whether declining or rising.

This is the way the market works, impulses are always larger than corrections and corrections are always smaller that or equal to a percentage of its impulse… a percentage like… 25%, 38.2, 50, 61.2… are you getting my drift ?

The correction is merely a price level at which traders decide to cash in profits - Since however there is two sides to the market, long and short, scared and greedy, confused and experienced etc… not everyone will take profit at that level, so the correction of the price is limited to a certain point… defined points we know as 25%, 38.2, 50, 61.2 etc.

A price movement is considered a correction ONLY if it corrects to a certain amount of the price.

For example if you have a bearish impulsive wave with a high of 1.100 and a low of 1.1:

  • It is ok to consider the new price movement a correction if it reaches only as far as 1.25 (25%) or 1.38 (38.2) or 1.50 (50%) or 1.61 (61.2) or even 1.75 (75%) [B]BUT[/B] if the price closes below 75% and moves further up, this is no longer a correction because it has reached price levels which are nearly or equal to reaching 100% of the previous move… this is not a correction

Corrections are just that: “they correct”, correcting in normal English does not envision absolutely emphasizing change, it means partially emphasizing and applying change, so a price movement which is which is corrected absolutely is not a correction of its impulse, but rather a whole new Impulse on its own.

It is possible to have 1 impulse wave then another impulse wave right after in such a case, but naturally the market moves firstly in an impulse and then in a movement that corrects that impulse to a Fibonacci level.

One more example:

Bearish Wave with H: 1.100 and L: 1.1

When the price corrects (upwards) it can reach:

[B]25%:[/B] Then start an impulse

This is an early correction meaning in my understanding that nobody hardly thought they should have taken profit and there is confidence that the decline will resume and still has much life

[B]38.2%:[/B] Then starts an impulse

This is the logical correction level that almost everybody asumes the price will bounce off it is closely watched by pros and newbees alike.

[B]50%: [/B]Then starts an impulse

This is normaly a very strong level and it is inbetween 38.2 / 61.8
"Some People" don’t draw a 50% leve, they just have 38.2 and 61.8 and they leave a gap inbetween, which they consider a level within which they will accept prices to be in a retracement area and would consider any price action there retracement relative.

This is useful as it is common for people to draw their Fibonacci levels from different points, consecutively ending up with varying retracement levels.

When you have a gap between 38.2 and 61.8 it gives you the opportunity to amass all probable retracement level differencials created by varying drawing techniques and to bring them within one stable retracement area.

[B]68.1%: [/B]Then starts an impulse

This is also a common retracement level. If the price fails at 38.2% people look for 68.1%

If a price breaks decisively out of 68.1%, you should start considering possibilities for this correction to actualy be an impulse and perhaps a new decline / rise… why ?

Because a rally is defined by: Higher Highs and Lower Lows, where as a Decline by Lower Lows and Lower Highs.

If a rally doesnt make a higher high, but stops rather somewhere inbetween its last correction and starts to decline AND ACTUALY makes a low below its correction or last higher low, you should wonder weather this rally is terminating.

Once again i stress.

RALLY = HH and HL
DECLINE = LH and LL

[B]75%:[/B] Then starts an impulse

At this point in time you should have taken the necessary measures to prepare yourself for a good exit or taking a loss.

Price movement around this level is dangerous and you should be as weary as a virgin chicken in a rooster-house :smiley:

If we have a close below this level we have a whole candle close (including wicks) below this level we are obliged to terminate our position.

Some would even terminate after a whole candle close below 61.8%

So… if a price corrects to 38.2 or 61.8 or in the gap between them and then moves up to 25% and closes a bove that with a good signal, it is ok to buy.

Vice Versa if a price corrects to 38.2 or 61.8 and keeps on moving down and closes below 75% it is ok to short.

These are simple guides synthesized from basic Elliot Wave and Fibonnacci principles, there is no magic.

Keep in mind that no matter how reliable a system is, you need to be weary of R and S levels.

I hope this somewhat helps Ahefner33
[B]Regards,[/B]
[B]E. Lang[/B]

PS: If you feel this post has helped you out with your trading or given you insight to a better trading attitude please reward it with a few modest Reputation Points.

More Rep Points = Happy Effi = More Posts = Bigger Brain… kapish ?

[B]GBP/USD DAILY REPORT[/B]

Cable strengthens mildly today but upside is still limited by 1.9777 resistance so far. As discussed before, the deep retreat from 1.9777 with mild bearish divergence condition in 4 hours MACD and RSI suggest a short term top is formed at 1.9777 and further consolidation is in favor to follow. As long as cable stays below 1.9777 resistance, risk remains for another pull back towards 1.9587 cluster resistance (38.2% retracement of 1.9261 to 1.9777 at 1.9580. However, we’d expect downside to be contained above 1.9452 cluster support (61.8% retracement of 1.9261 to 1.9777 at 1.9458) and bring rally resumption.

On the [B]upside[/B], above 1.9777 again will indicate rally from 1.9261 has already resumed for next upside target of 1.9846 high and then 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9917.

In the bigger picture, correction from 1.9846 has completed after three waves down to 1.9261. Break of 1.9846 high will confirm that rally from 1.8517 has resumed. However, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches key cluster resistance of 2.0106 (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067).

On the [B]downside[/B], it will take a break below 1.9452 support to indicate argue that the whole rise from 1.9261 has completed and shift short term focus back to the downside.